Chapter 7.36 — TRANSIENT OCCUPANCY TAX

Sections:

7.36.010 Title. 7.36.020 Definitions. 7.36.030 Imposition--Amount--Time of payment. 7.36.040 Exemptions--Claim required. 7.36.050 Collection--Operator requirements. 7.36.060 Hotel registration and certificate required. 7.36.070 Reporting and remitting of amounts collected. 7.36.080 Delinquent or fraudulent payment--Penalties and interest charged. 7.36.090 Failure to collect or report--Tax administrator determination authority--Notice and hearing. 7.36.095 Administrative appeal to the City Manager from tax administrator decision. 7.36.110 Recordkeeping required. 7.36.120 Successor liability following sale of business. 7.36.130 Lien. 7.36.140 Actions to collect authorized when. 7.36.150 Violation--Penalty.

This chapter shall be known as the "uniform transient occupancy tax ordinance of the City of Berkeley." (Ord. 4077-NS § 1, 1965)

Except where the context otherwise requires, the definitions given in this section govern the construction of this chapter.

A. 1. "Hotel" means any structure, or any portion of any structure which contains one or more rooms which have, for a majority of the days that any such room was occupied during the most recent calendar year, been occupied for periods of thirteen consecutive days or less by the same occupant(s).

2. Subject to the foregoing sentence, "hotel" may include, but is not limited to, any hotel, inn, tourist home
or house, motel, studio hotel, bachelor hotel, lodging house, dormitory, public or private club, mobile home
or house trailer at a fixed location, or other similar structure or portion thereof.

3. "Hotel" does not include any of the following: any hospital, sanitarium, medical clinic, convalescent
home, rest home, home for aged people, foster home to other similar facility operated for the care or
treatment of human beings; any asylum, jail, prison, orphanage or other facility in which human beings are
detained and housed under legal restraint; any housing owned by or controlled by any educational institution and used exclusively to house students, faculty or other employees; any housing owned by any governmental
agency and used to house its employees or for governmental purposes; or any other housing furnished by an
employer exclusively for employees.

B. "Occupancy" means the use or possession, or the right to the use or possession of any room or rooms or portion thereof, in any hotel for lodging or sleeping purposes.

C. "Operator" means the person who is proprietor of the hotel, whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee, or any other capacity. Where the operator performs their functions through a managing agent of any type or character other than an employee, the managing agent shall also be deemed an operator for the purposes of this chapter and shall have the same duties and liabilities as their principal. Compliance with the provisions of this chapter by either the principal or the managing agent shall, however, be considered to be compliance by both.

D. "Person" means any individual, firm, partnership, joint venture, association, social club, social organization, joint stock company, corporation, estate, trust, business trust, receiver, trustee, syndicate, or any other group or combination acting as a unit.

E. "Rent" means the consideration charged, whether or not received, for the occupancy of space in a hotel valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits and property and services of any kind or nature, without any deduction therefrom whatsoever, except for charges passed through to a Transient to pay for the Berkeley Tourism Business Improvement District established on September 18, 2012, by Resolution 65,899-NS, as well as any successor thereof, as long as such charges are: (1) separately stated and identified as such on the bill; and (2) do not exceed the amount of the assessment attributable to that Transient’s Occupancy.

F. "Tax administrator" means the director of finance or their designee.

G. "Transient" means any natural person who occupies a room in a hotel for less than 30 days. (Ord. 7269-NS § 1, 2012; Ord. 6404-NS § 1, 1998; Ord. 5963-NS § 1, 1989; Ord. 4077-NS § 2, 1965)

For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of 12% of the rent charged by the operator. Said tax constitutes a debt owed by the transient to the City which is extinguished only by a payment to the operator or to the City. The transient shall pay the tax to the operator of the hotel at the time the rent is paid. If the rent is paid in installments, a proportionate share of the tax shall be paid with each installment. The unpaid tax shall be due upon the transient’s ceasing to occupy space in the hotel. If for any reason the tax due is not paid to the operator of the hotel, the Director of Finance may require that such tax shall be paid directly to the Director of Finance. (Ord. 6060-NS, 1991; Ord. 5761-NS § 1, 1986; Ord. 5056-NS § 1, 1978; Ord. 4708-NS § 1, 1974; Ord. 4321-NS (part), 1968; Ord. 4077-NS § 3, 1965)

A. No tax shall be imposed upon:

1. Any person as to whom, or any occupancy as to which, it is beyond the power of the City to impose the tax herein provided;

2. Any officer or employee of government who is exempt by express provision of federal international treaty;

3. Any customer of a bed and breakfast establishment as defined in Section 23F.04.010, which is located in a residential zoning district, has been in consistent operation as of January 1, 2003, and the continued operation of which is permitted under Chapter 23C.06.

B. No exemption shall be granted except upon a claim therefore made under penalty of perjury upon a form and in the manner prescribed by the tax administrator. (Ord. 6774-NS § 1, 2003; Ord. 5963-NS § 1, 1989; Ord. 4115-NS (part), 1965; Ord. 4077-NS § 4, 1965)

Each operator shall collect the tax imposed by this chapter to the same extent and at the same time as the rent is collected from every transient. The amount of tax shall be separately stated from the amount of the rent charged, and each transient shall receive a receipt for payment from the operator. No operator of a hotel shall advertise or state in any manner, whether directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the operator, or that it will not be added to the rent, or that, if added, any part will be refunded except in the manner hereinafter provided. (Ord. 4077-NS § 5, 1965)

Within 30 days after August 12, 1965, or within 30 days after commencing business, whichever is later, each operator of any hotel renting occupancy to transients shall register said hotel with the tax administrator and obtain from them a "transient occupancy registration certificate" to be at all times posted in a conspicuous place on the premises. Said certificate shall, among other things, state the following:

A. The name of the operator;

B. The address of the hotel;

C. The date upon which the certificate was issued;

D. "This Transient Occupancy Registration Certificate signifies that the person named on the face hereof has fulfilled the requirements of the Uniform Transient Occupancy Tax Ordinance by registering with the Tax

Administrator for the purpose of collecting from transients the Transient Occupancy Tax and remitting said tax to the Tax Administrator. This certificate does not authorize any person to conduct any unlawful business or to conduct any lawful business in an unlawful manner, nor to operate a hotel without strictly complying with all local applicable laws, including but not limited to those requiring a permit from any board, commission, department or office of this City. This certificate does not constitute a permit." (Ord. 4077-NS § 6, 1965)

Each operator shall, on or before the last day of the month or at the close of any shorter reporting period which may be established by the tax administrator, make a return on the tax administrator, on forms provided by them of the total rents charged and received and the amount of tax collected for transient occupancies; provided, however, that the operator shall pay the tax for the last quarter (April 1st-June 30th) of the fiscal year 1965-66 on or before June 30, 1966, such payment to be based upon estimates to the extent that may be necessary and any overpayment or underpayment for such quarter shall be applied against the payment for the first quarter of the 1966-67 fiscal year. At the time the return is filed, the full amount of the tax collected shall be remitted to the tax administrator. The tax administrator may establish shorter reporting periods for any certificate holder if they deem it necessary in order to insure collection of the tax and they may require further information in the return. Returns and payments are due immediately upon cessation of business or any reason. All taxes collected by operators pursuant to this chapter shall be held in trust for the account of the City until payment thereof is made to the tax administrator. (Ord. 5956-NS § 1, 1989; Ord. 4077-NS § 7, 1965)

charged.

A. Original delinquency. Any operator who fails to remit any tax imposed by this chapter within the time required shall pay a penalty of 10% of the amount of the tax in addition to the amount of the tax.

B. Continued delinquency. Any operator who fails to remit any delinquent remittance on or before a period of 30 days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of 10% of the amount of the tax in addition to the amount of the tax and the 10% penalty first imposed.

C. Fraud. If the tax administrator determines that the nonpayment of any remittance due under this ordinance is due to fraud, a penalty of 25% of the amount of the tax shall be added thereto in addition to the penalties stated in subsections A and B of this section.

D. Interest. In addition to the penalties imposed, any operator who fails to remit any tax imposed by this chapter shall pay interest at the rate of 1% per month or fraction thereof on the amount of the tax, exclusive of penalties, from the date on which the remittance first became delinquent until paid.

E. Penalties merged with tax. Every penalty imposed and such interest as accrues under the provisions of this section shall become a part of the tax herein required to be paid. (Ord. 5838-NS § 1, 1987; Ord. 4077-NS § 8, 1965)

authority--Notice and hearing.

If any operator shall fail or refuse to collect said tax and to make, within the time provided in this chapter, any report and remittance of said tax or any portion thereof required by this chapter, the tax administrator shall proceed in such manner as they may deem best to obtain facts and information on which to base their estimate of the tax due. As soon as the tax administrator shall procure such facts and information as they are able to obtain upon which to base the assessment of any tax imposed by this chapter and payable by any operator who has failed or refused to collect the same and to make such report and remittance, they shall proceed to determine and assess against such operator the tax, interest and penalties provided for by this chapter. In case such determination is made, the tax administrator shall give a notice of the amount so assessed by serving it personally or by depositing it in the United States mail, postage prepaid, addressed to the operator so assessed at their last known place of address. Such operator may within ten days after the serving or mailing of such notice, make application in writing to the tax administrator for a hearing on the amount assessed. If application by the operator for a hearing is not made within the time prescribed, the tax, interest and penalties, if any, determined by the tax administrator shall become final and conclusive and immediately due and payable. If such application is made, the tax administrator shall give not less than five days’ written notice in the manner prescribed herein to the operator to show cause at a time and place fixed in said notice why said amount specified therein should not be fixed for such tax, interest and penalties. At such hearing, the operator may appear and offer evidence why such specified tax, interest and penalties should not be so fixed. After such hearing the tax administrator shall determine their proper tax to be remitted and shall thereafter give written notice to the person in the manner prescribed herein of such determination and the amount of such tax, interest and penalties, the amount determined to be due shall be payable after 15 days unless an appeal is taken as provided in Section 7.36.095. (Ord. 5963-NS § 1, 1989; Ord. 4077-NS § 9, 1965)

decision.

A. Any operator aggrieved by any decision of the tax administrator with respect to the imposition and/or amount of any tax, interest and/or penalties pursuant to this chapter may appeal such decision to the City Manager by filing a verified appeal with the City Manager within 15 days after notice of the decision of the tax administrator has been mailed. Any such appeal shall be in writing and shall contain a statement setting forth all factual and/or legal grounds for such appeal.

B. The City Manager may issue and apply such regulations as may be reasonable and necessary to hear and determine such appeals.

C. In ruling on any such appeal, the City Manager or their designee may, in their discretion, either conduct an informal hearing at which the operator shall have the right to appear and present evidence and arguments, or alternatively, consider only the written appeal and any other relevant materials.

D. After considering any such appeal, the City Manager or their designee shall notify the operator in writing of their ruling on the appeal.

E. The City Manager’s decision shall be final. (Ord. 7150-NS § 2, 2010; Ord. 5963-NS § 2, 1989)

It shall be the duty of every operator liable for the collection and payment to the City of any tax imposed by this chapter to keep and preserve, for a period of three years, all records as may be necessary to determine the amount of such tax as they may have been liable for the collection of and payment to the City, which records the tax administrator shall have the right to inspect at all reasonable times. (Ord. 4077-NS § 11, 1965)

If any operator liable for any amount under this chapter sells out their business or quits the business, their successors or assignees shall withhold sufficient of the purchase price to cover such amount until the former owner produces a receipt from the tax administrator showing that it has been paid or a certificate stating that no amount is due. If the purchaser of a business fails to withhold from the purchase price as required, they become personally liable for the payment of the amount required to be withheld by them to the extent of the purchase price, valued in money. (Ord. 4077-NS § 12, 1965)

A. If any amount required to be paid to the City under this chapter is not paid when due it shall constitute an assessment against any real property in the county owned by the operator or acquired by them afterwards and before the lien expires.

B. The tax administrator may, within three years after the amount is due, file for record in the office of the Alameda County Recorder a certificate specifying the amount of tax, penalties and interest due, the name and address as it appears on the records of the tax administrator of the operator liable for the same and the fact that the tax administrator has complied with all provisions of this chapter in the determination of the amount required to be paid.

C. The lien has the force, effect and priority of a judgment lien, except that it shall continue until discharged.

D. At any time within three years after any operator is delinquent in the payment for any amount herein required to be paid off, the tax administrator may issue a warrant for the enforcement of any liens and for the collection of any amount required to be paid to the City under this chapter. The warrant shall be directed to any sheriff, marshal or constable and shall have the same effect as a writ of execution. The warrant shall be levied and sale made pursuant to it in the same manner and with the same effect as a levy of and a sale pursuant to a writ of execution. The tax administrator may pay or advance to the sheriff, marshal or constable, the same fees, commissions and expenses or their services as are provided by law for similar services pursuant to a writ of execution.

E. Seizure and sale. At any time within three years after any operator is delinquent in the payment of any amount, the tax administrator may forthwith collect the amount in the following manner: The tax administrator shall seize any property, real or personal, of the operator and sell the property, or a sufficient part of it, at public auction to pay the amount due together with any penalties and interest imposed for the delinquency and any costs incurred on account of the seizure and sale. Any seizure made to collect occupancy taxes due shall be only of property of the operator not exempt from execution under the provisions of the Code of Civil Procedure. (Ord. 6404-NS § 2, 1998)

Any tax required to be paid by any transient under the provisions of this chapter shall be deemed a debt owed by the transient to the City. Any such tax collected by an operator which has not been paid to the City shall be deemed a debt owed by the operator to the City. Any person owing money to the City under the provisions of this chapter shall be liable to an action brought in the name of the City for the recovery of such amount. (Ord. 4077-NS § 14, 1965)

Any person violating any provision or failing to comply with any of the requirements of this chapter shall be deemed guilty of an infraction as set forth in Chapter 1.20 of this code. (Ord. 5591-NS § 1 (part), 1984; Ord. 4077-NS § 15, 1965)